What's the problem about bots?

And bots are always right? If I offered a price and a bot continually jumped in front of me then why not back the other side? Aren't bots just making a market? Isn't this just a way of sorting those who know a true price from those who don't?

A true price being subjective of course as there's no such thing.

Bots cannot actually identify the winner (I believe) so their role must be in trading. I don't use them because of that. I find them very difficult to understand even after exploring different ones. They are not, I believe, a 'magic bullet' as they would have you believe. It is mathematically impossible for all punters involved in the outcome of a football match or a horse race, to win. I'm sure, Charlie, that you are trying to find out how these things work but it's posible that people either don't know or are not prepared to reveal. Intense scrutiny is not the hallmark of the betfair forum.

bots can often distort markets. on the NZ cricket matches the price kept moving in to 1.5 and then back out to 1.6 for no reason whatsoever out of hours of play - all bot driven - in a funny way this creates opportunities for astute human beings :-)

The problem with bots in the early markets is they don't offer value most of the time (this is where they come into their own -offering terrible value ) - only when you stick up a realistic price do the bots then jump in front of you .
If bots offered value the whole time then most wouldn't have a problem with them .

An algorithm never gives away value. Markets with bots tend to be very boring and i think that this fact plays a small role when it comes to the liquidity we see. Nothing unexpected happens unless there is a big backer comming in at a higher price in play and you can munch him up before the bots move up.I remember the first ones that appeared on the smaller basketball markets for 4-5 years ago, they annoyed the hell out of me. A market like total points in basketball is totally ruined by the bots and i never bother with looking at them any more

Thanks for replies.
Hope I didn't mislead people with title of thread. Should have been something like: Why do people dislike bots?

If I've interpreted replies correctly it's because they put more accurate prices up, especially early ones, than people. E.g. if they think (not that bots think) a price is too high they put in a lower offer. So the person who put up the earlier price was trying to get matched by a non-savvy person and bots spoil this.

Is that a fair summary by me?

How can bots be both 'offering terrible value' and 'jumping in front of people's bets'?

If the bots are terrible value, then the 'real people' bets must be even worse value.

Magoo- my assumption is -  The bots we are talking about (the 'rogue' bots ) are not used as a tool for making a profit by using betting skills or edges , they are simply used by someone with a lot of money  in order to cover all the games giving low value but only give better odds if pushed .

They don't serve a useful purpose to the buyer - if they weren't there the buyer would  place their bet at a bookies where they might get some value , or not back at all.

The manual layer of bets can't be everywhere at once, unless they have similar mountains of cash

I think I've got my head around this now.

Starting from bookie prices and adjusting for over-round and long shot aversion bots are programmed to keep offering odds until the adjusted prices are met. As adjusted bookie prices form an efficient market (zero sum) this leaves no fat for anyone else.

Presumably different algorithms are used to calculate what prices to offer which can result in mini bot wars. For quite a few sports well known in-play algorithms are used to calculate what constitutes a profitable offer.

Bots don't do anything humans can't. They just do it faster and with potentially many repetitions.

I have in the past kept going in front of a bot until it stopped going in front of me. Then, as that was the best price the bot would offer, I took it. Only works in illiquid markets, but I can have big positions in these markets and want to spread my risks.

Bots are a benefit to punters but not to traders. Which is where the whining comes from.

I am 100% confident I could out-perform any bot via discretionary betting over a 5 day test match. The bot hasn't got a chance against nuanced judgements that the human mind can make

in the early days of bots there was one that operated in the T20s - it was laughable and big bets. The forum boys all called it "Mr Lumpy". I assume that it was a bot, the only other alternative is somebody very rich and stoned

Bots are a benefit to punters but not to traders
____________

They most certainly are a benefit -   but only if you know what you're buying ...otherwise they often  catch out the unwary by offering very poor prices

The assumption seems to be that bots are very clever and always know what they are doing.  I get the impression from horse racing that some are just running on a suck it and see basis ie somebody thinks I might make a profit work if  shove the price around in this manner.  I often see the same thing happening for a few days or weeks then it stops.  Obviously wasn't that profitable.

trader pj 09 Dec 16 09:55 Joined: 13 Nov 02 | Topic/replies: 6,423 | Blogger: trader pj's blog
I am 100% confident I could out-perform any bot via discretionary betting over a 5 day test match. The bot hasn't got a chance against nuanced judgements that the human mind can make

I'm sure that's right although once an exchange goes down the path of becoming automated it's hard to go backwards. I wouldn't be surprised if software were to emerge in the future which would out perform and have better judgement than any gambler, which would rather change the game somewhat as said software is likely to become widely available.

bots are machines and operate with ever increasing speed, but this has absolutely nothing (ZERO) to do with judgement

good excuse though for all the almost winners here: i am the greatest, it's the bots fault

fixed 11 Dec 16 03:24 Joined: 11 Apr 06 | Topic/replies: 244 | Blogger: fixed's blog
bots are machines and operate with ever increasing speed, but this has absolutely nothing (ZERO) to do with judgement

good excuse though for all the almost winners here: i am the greatest, it's the bots fault

You miss my point- that AI software can be developed in future that will outstrip gamblers when it comes to judgement

if software were to emerge in the future which would out perform and have better judgement than any gambler
_____________

that would be impossible - Lewisham is very much correct there

The bookies may well use an automated approach  but they allow built in margins to start with .

Even they have to ban proftable gamblers .

sorry ,i meant pj was correct  .

Dec 10, 2016 -- 5:07PM, lewisham ranger wrote:

trader pj 09 Dec 16 09:55 Joined: 13 Nov 02 | Topic/replies: 6,423 | Blogger: trader pj's blogI am 100% confident I could out-perform any bot via discretionary betting over a 5 day test match. The bot hasn't got a chance against nuanced judgements that the human mind can makeI'm sure that's right although once an exchange goes down the path of becoming automated it's hard to go backwards. I wouldn't be surprised if software were to emerge in the future which would out perform and have better judgement than any gambler, which would rather change the game somewhat as said software is likely to become widely available.

Deep Blue beat Kasparov after a number of years of research and work of brilliant minds - the bookies are 20 years behind that imo, plus I suspect that most of the better bots are run by enthusiastic amateurs rather that full scale pro- ops. Imight be wrong on the latter point

Coachbuster 11 Dec 16 10:27 Joined: 08 Apr 06 | Topic/replies: 35,352 | Blogger: Coachbuster's blog
if software were to emerge in the future which would out perform and have better judgement than any gambler
_____________

that would be impossible - Lewisham is very much correct there

Why is it impossible? Are you saying the development of AI is impossible?

trader pj 11 Dec 16 14:27 Joined: 13 Nov 02 | Topic/replies: 6,426 | Blogger: trader pj's blog
Dec 10, 2016 -- 11:07PM, lewisham ranger wrote:

trader pj 09 Dec 16 09:55 Joined: 13 Nov 02 | Topic/replies: 6,423 | Blogger: trader pj's blogI am 100% confident I could out-perform any bot via discretionary betting over a 5 day test match. The bot hasn't got a chance against nuanced judgements that the human mind can makeI'm sure that's right although once an exchange goes down the path of becoming automated it's hard to go backwards. I wouldn't be surprised if software were to emerge in the future which would out perform and have better judgement than any gambler, which would rather change the game somewhat as said software is likely to become widely available.

Deep Blue beat Kasparov after a number of years of research and work of brilliant minds - the bookies are 20 years behind that imo, plus I suspect that most of the better bots are run by enthusiastic amateurs rather that full scale pro- ops. Imight be wrong on the latter point

Yes but Deep Blue would be routinely crushed by the chess software around today. So that kind of artificial intelligence software would I imagine be quite widely available to people who trade on the stock exchange, and therefore it doesn't take a huge leap to think that punters/bookmakers might be privy to it

I have no idea what kind of software bookmakers are using, but I imagine they have quite sophisticated programs and algorithims which help them to calculate odds and so on. Surely it's naive to think they don't.

Why is it impossible? Are you saying the development of AI is impossible?
_________________________________________

It's a long way away ,and it's  tipped to finish us all off one day .

But  in the short term  there will always be a handful of gamblers out there capable of reading the markets more accurately because of the emotions that play a part in results .

No one yet has completely cleaned the markets out  .

"Presumably different algorithms are used to calculate what prices to offer which can result in mini bot wars. For quite a few sports well known in-play algorithms are used to calculate what constitutes a profitable offer."

What are these well known in-play algorithms? Are there any forum threads discussing them?

Don't know any forum threads that discuss this.

Soccer has algorithms to calculate odds for number of goals, team to score next, which team will win (there are others) according to score and how many minutes have gone in game. These have been going for over 10 years. American football and baseball have similar ones with obvious differences. Both rugby codes also do. Cricket has D/L and variations on it.

All of these (apart from D/L?) start from a supremacy rating (or similar) for a team which is adjusted according to state of play.

there is no AI. there is human intelligence and there is the speed of the machines and those 2 can be combined to create impressive results...so impressive in fact that a lot of people get scared and use those vague weak undefined AI nonsense to declare the future will be run by bots


humans will always beat bots if intelligence and judgement is needed (and present, not a given if you go through all these posts here)

There is a lot of ignorant nonsense talked about AI and has been for a very long time.

Some sports can be reliably modelled, such as soccer. Others are more difficult to model such as cricket. To give one example well known to cricket punters, how the pitch will play. Highly paid, supposed experts consistently get this wrong. And this is a crucial factor in the outcome of matches, leaving plenty of room for individual judgement.

However, models will get better over time, leaving less room for individual judgement, but we are quite a way from that currently in some sports.

And there are behavioural factors. A different discussion.

Charlie, I think I have seen a web page about a model you describe... However, don't those odds go out of the window when events such as penalties, corners and free kicks occur? How can the bots avoid these situations? Does Betfair's API provide data about these events, time since kick off, score etc...?

How can the bots avoid these situations?

Obviously, they can't. One approach is called a Monte Carlo Simulation, which basically runs a large number of simulations of the match, and then assigns probabilities of various outcomes. As the match progresses, goals are scored, etc, the simulations are rerun incorporating what has happened so far in the match.

There are other approaches to modelling sports, but MCS is popular.

humans will always beat bots if intelligence and judgement is needed

Just as it was claimed before that we'd always beat them at chess and shogi, two games which require intelligence and judgement.

Perhaps as you're so intelligence and I'm so dim you're be happy to point out the difference?

Intelligent even

Oh dear my poor I.Q. letting down my spelling again

I think  it's the emotional side  Lewisham that would be very hard to model.

You must have watched a game of football or even tennis , where discipline goes out of the window and all hell breaks loose in the scoring  - that doesn't really happen in computerised chess.

The point about bots is they may not yet be superior to humans but they are to many so they raise the level that a human must be at to be successful....which means there are fewer humans left in the game.

Maybe coach but I was more thinking of betting before events, and presumably you could eventually build a bot that takes advantage of human emotional weakness in any case

for example if facial recognition software (which admittedly is one of the machines weak points) was good enough it could recognise negative and positive microexpressions and bet accordingly, and also identify when markets are likely to overreact in play.

lr, there are 2 issues there. What is happening in the match, and what is happening with those betting on the match. The match and the market can diverge for various reasons, usually only for a limited time.

yes pxb but a well-programmed bot will be able to factor that in. Human behaviour is inherently predictable, even though it often seems completely random...

Just to give an example if you read up about people using software in poker, well until recently they weren't considered strong enough to make money from poker sites, but the sites themselves have had to tighten up their software exclusion policies after a number of high-profile cases where big winners have later been shown to be using software.

And poker is extremely similar in psychology to say trading in play on a sporting event, in that judgement of human behaviour is crucial.

I just think there are too many variables to model . But i like the idea of computers picking up on expressions and body language etc  -  would be very interesting  .

The number of variables isn't an issue for models. The problem is quantifying difficult to quantify variables like player confidence. I don't know about other sports, but it's huge in cricket. Batsmen will typically get runs of good scores and then runs of bad scores, and there isn't any other reason except confidence.

well just factor in recent form then.

Bots have been on here for absolutely ages, the thing killing the markets is betfair opening their own normal betting method and hiding the exchange as a distant wierd cousin, and without bots liquidity would be horrendous.

Thats the crux of the matter, Just Checking. Liqudity on Horse Racing (and presumably other sports) has declined markedly since the advent of the Sportsbook. It is killing the exchange. Like a bird with two chicks that only feeds one of them. In a year or two day to day Horse Racing betting will more or less dead on here, sadly.

this silly "dead in a year or two" prediction has been made at least 8 years in a row now...and will be repeated forever

and whoever uses chess, which is not a complex multidimensional dynamic game but simply a slow static limited and boring calculation exercise that results in identical positions again and again after hours of play, ends in a draw most of the times and of course will be won by the biggest computer, as evidence that machines are superior only demonstrates he doesn't understand the difference between a brain and a calculator


the bots here are great. most underrated quality: they are sharp enough to let everybody know pretty fast whether they are above the line or not

and whoever uses chess, which is not a complex multidimensional dynamic game but simply a slow static limited and boring calculation exercise that results in identical positions again and again after hours of play, ends in a draw most of the times and of course will be won by the biggest computer,

Oh dear. Your breathtaking ignorance was really exposed by your last comment.

Fixed, the time scale may be wrong but it is still happening.

What has not been mentioned here and is crucial in my experience and is the difficulty..

PJ mentioned Mr Lumpy(bot)or Asian money possibly also, on the cricket markets........

So the problem as i see it, is often the bot is dictating/controlling the market in such a way that it alone has bought all the perceived value to the point where everyone else is drowning or and panic selling at a false price which the bot has manufactured,leaving everyone else sweating on a opposite result which may becoming to appear more lightly but which the bot wont release the pressure on the price and if/and when it does, it squashes the life out of the other side rapidly to a point again of no value.This leaves joe bloggs in a place where he might choose not to operate but if he does he knows even if he is seemingly going to be shrewd and correct he may also get cut off at the knees often when he does not get it spot on as entry and exit points will be distorted by weight of money and que jumping.......

I know some will get this and others will wonder WTF...

sORRY if i have not been clear.........

Market distortions are always opportunities to make money. Whether it's bots, bookies, high rollers doesn't matter to a trader.

Agreed.  You just have to be careful you don't commit too great a proportion of your bank when the odds are wrong.  There's no point getting value if it bankrupts you.

never a truer word spoken

Very interesting thread.

One point that I think is often overlooked is that bots are available to everyone: you can get hold of software very easily (a few apps reviewed recently in another thread), you could pay a developer to build something for you or you could try and write your own. So for very little cost, anyone with excellent judgement and knowledge could add a bot to their ability to trade in the market.

Another thing that I think is important to point out is the difference between the judgement/expertise part (i.e. pricing up a market) and the execution part (i.e. managing to get matched at target price or better). On the execution part bots have a massive advantage, as speed is important, but again bots and automated tools are available to everyone at a pretty low cost of entry. The judgement part is more difficult. AI, or machine learning can go a long way to look for patterns in a massive complex data set, and has the very valuable benefit of not allowing emotions to cloud decision making.

Market manipulation of various kinds have also been mentioned by people in this thread. One thing that I like about sports markets that is not true about financial markets is that the event itself actually happens, and so if you are sure you have a good price you can hold out until the result is in and if you're correct, over time you will make a profit. However in financial markets there is the old adage that markets can remain irrational longer than you can remain solvent, so you don't just have to be right you also have to predict the market 'correction'. Bots unfortunately do create an opportunity for market manipulation, but as suggested earlier this will be to the detriment of traders while it should present an opportunity for the gamblers who want to hold on to their bet.

I haven't had time to read all this, apologies, but the issue for punters trying to back at early prices is that the bots create arbs.

Most punters can't take early prices with the bookmakers. So if you want to back a horse at 8-1, you might put your money up at 9.0 on Betfair.

Immediately a bot will jump in front, for no other reason than that you want to have a bet.

Suddenly the price is an arb, the bookmakers, who are watching Betfair markets constantly, cut their odds in response, and the price is gone without anyone having a bet (many 'gambles' are provoked in precisely this way, imho).

The problem of course is the transparency of the Betfair queue, which insists that early punters scream out their opinion to every trading scalper in Christendom.

The result of this, of course, is that because of these trading parasites, early price punters just don't use Betfair, making it, at least before close to the off, the ultimate betting absurdity - a betting platform where it's suicidal to try to have a bet...

That's a problem with bookmakers slavishly following the slightest move on Befair.

If a £5 bet can make them cut their prices and then when the price on Betfair drifts out not to push their prices out who's fault is that? The spineless Bookies.

If Bookies had an opinion punters could get on.

I find it hard to believe that bookmakers are changing their prices because of a £2 bot on an unliquid market on betfair.

If betfair is informing the market then it's more likely to be closer to the time.

for example the statement early price punters just don't use Betfair, making it, at least before close to the off, the ultimate betting absurdity - a betting platform where it's suicidal to try to have a bet...

this is patently wrong, you look at the 4.30 from dundalk today and the market is pretty much formed, no real gap in the prices.

Lewisham, I'm pretty sure the bookmakers have automated the price reductions the moment something trades below their prices on here - and, of course, they really hate laying arbs.

Apart from the big meetings the early racing markets usually have tumbleweeds blowing through them - I would suspect the Dundalk market is down to the lack of action today...

I find it hard to believe that bookmakers are changing their prices because of a £2 bot on an unliquid market on betfair.

Believe it.

screaming from beneaththewaves 23 Dec 16 18:31 Joined: 30 Jan 05 | Topic/replies: 9,391 | Blogger: screaming from beneaththewaves's blog
I find it hard to believe that bookmakers are changing their prices because of a £2 bot on an unliquid market on betfair.

Believe it.

well I don't and the firmness of your answer isn't going to make me believe it anymore.

Do you really think that multi-billion pound companies are going to be manipulated by someone fiddling around with a 2 quid bet on betfair? Are you really that delusional? I fully agree that Betfair does influence bookmaker prices but not when you're talking about those amounts.

You only have to witness the utter confusion and lack of early prices when the Betfair site goes down to understand that the above is correct and the Betfair markets (weak as they are) are leading the way.

Have posted this or similar before

For me a small punter(yes small amounts)
on tennis/cricket etc when you submit a bet at ex 1.34 to back within the delay
the market has moved to 1.32 if i put in a bet to lay the market drifts to 1.36
so i don't get matched either way.Which although i find this hard to believe is
Do we all actually have the same market price at the same time?because surely i'm not the
only person wanting a bet in the market or are the bots so quick it changes that fast
But i can not always be wrong back/lay but due to market moves i am.

If there is a bot operating on the market you're looking at, it could be refreshing prices several times per second, so, yes, bots CAN be that fast.

So bots are not subject to the 5sec or what ever delay on the markets then
which puts you then at a massive disadvantage.Or is a bot shadowing every person operating
on said market and just keeps jumping in front?.

Ah, sorry, I missed the bit about it being in-running.  Bots are (or at least should be - possible exception being anything BF is operating in a cross-matching capacity) subjected to the same delays as everyone else.

I have made a good living botting betfair for years so I feel well placed shed a little light on this for the normal punter.

First - there is no "bots vs humans." Bots are programmed by humans so it's humans vs humans. There are a few smart bot programmers who make a lot of money and a pyramid of less effective players beneath them who scrape by or make a loss. It is far from easy to make good returns from bots, it takes a lot of work and a very particular type of mindset.

On modelling events: This appears to be poorly understood in the posts above. When my robots are analyzing an event (a horse race for example) the only information they have available to them is the betting activity on the exchange, they cannot reasonably surmise from that what the likely outcome of the event is. What they can do is identify the patterns of betting behavior that are typically present when the prices diverge from true value, make a reasoned estimate of true value and bet when it is likely that there is some margin available. To give a really simple example: Say 20 seconds into a race a horse suddenly goes from trading at 100 to 1.5 - well that might be because a load of other horses have just fallen or it might be that the horse has been over bet in a panic response to a more minor incident. If the robot decides that such a big move is likely to be an over reaction it will lay that horse somewhere between 1.5 and whatever it thinks is a more likely true price. At the same time it will be looking to see if any other horses have suddenly become value to back. The effect of this for "normal" punters is one of two things: if the horse has been over bet then it is pushed back towards true value (good for backers in this example), and if it hasn't then you can take my money - either way this is good for anyone who wants to back the horse and bad for anyone who wants to lay it. Of course this is an over simplification of how likely value is determined but hopefully it gives the idea. On some other sports a bit more information on the actual event is available, but the basic principal remains that what you analyse is primarily the betting and NOT the event.

On AI: AI isn't a box of magic that just does things for you, it's a set of complex and difficult systems. Personally I don't use AI and I suspect very few people do but I do use Machine Learning (which is often confused with AI). Machine learning is the use of learning algorithms to analyse data. My robots don't use ML directly but they do run models whose parameters are informed by research aided by machine learning techniques. As I understand it a true AI robot would be placing bets, independently analyzing their results and then adjusting its own algorithm without intervention. It is this feedback loop that makes it 'Intelligent.' This is complex and computationally expensive so I doubt many find it worth the bother and I would imagine that machine learning informed models is about as far as it goes. There is nothing to stop non automated punters from using exactly the same type of techniques to inform their own betting. If I had to bet 'by hand' that's what I'd do.

As to whether humans can beat bots: It depends on the human and it depends on the bot. In an overall sense humans can't beat my bots because they simply won't bet without a very strong indication that they will be getting value. At the level of the individual transaction however there will be thousands of occasions every day where I'm giving away money to the person who (in the example above) can see that all the other horses HAVE fallen. Maybe somewhere out there is a person who's very good at taking all my bad bets and never takes any of my good ones. If so He's very very rich and good on him. Quite apart from bots v humans there is bots v bots. Smart automated players are able to make guesses at the strategies used by less experienced botters, anticipate where they are likely to give away value and bet against them using superior models. To know what type of players come out on top overall we'd need to see everyone's overall ranking and that's not about to happen. Frankly though, the number of substantial winners on betfair is so vanishingly small that I can hardly see why it would matter.

On Queue Jumper bots: Let's be clear - I don't do this, but I suspect the reason some people do is simply that they want to make up the market close to 100% and they don't have any information with which to do it except the prices that others are willing to put up. If you ask me it's a pretty lame way of operating, but on the other hand I don't really see why people get so upset about it. It might be a bit annoying but were you ever going to get matched anyway? Ultimately the market has to build to close to 100% before any significant volume will be matched and it's all part of the process.

I hope that clarifies a few things, what bots do and (broadly) how they work isn't a secret so if anyone has questions I'll answer.

Aye robot thank you for your considered and honest response.

However one thing bugs me, you seem to claim that the sheer volume of your trades (and others who do the same) helps to maintain liquidity (which is no doubt true) and yet isn't it rather depressing that such a large amount of betfair relies on gamblers running software? isn't it really supposed to be a punter vs punter platform, and advertised as such?

And while you claim that developing AI that would be successful on betfair is expensive, aren't the costs of this likely to drop substantially in the near future as such technology becomes easier to develop?

Regarding AI - I mean "computationally expensive" - as in it takes a lot of computing power. Most of the time you're trying to write the fastest, simplest, cleanest code you can so that it executes quickly. You wouldn't want to go gumming it up with a lot of unnecessary AI stuff unless you really saw huge advantages from it.

On the wider question - I get that it's frustrating for some people to find that they're facing such opposition but what can I say - that's the game as Betfair laid it out. Betfair actively supports bots and does everything to make it easy for us - there is specialist support, they publish helpful documentation on how to interact with their systems and even host a dedicated forum. They're making me welcome - so why shouldn't I play?

Recently I haven't posted much on these forums but in the past I've made no secret of my activities. As to whether Betfair should advertise differently - that's a question for them.

Maybe you think people wouldn't play if they knew what they were taking on - I'm not so sure. Everybody knows that you can't beat the high street bookies but in they go.... I think there are people out there who rather like the idea of taking money off the likes of me and I wish them good luck with it. On the other hand there are numerous recreational punters who just want to get a bet on - I'm glad to oblige. Of course there will be people who think the reason they're losing their money is bots but that's just denial. Gamblers have always had their excuses.

Truth be told - most of the time you'd have no idea what bots are operating or whether you're betting against them. Sure there are a few small time simpleton efforts trying to be first in the queue at 9am but the real players are predominantly getting stuck in to the in-running chaos where ordered thinking and cool heads rule.

Finally - I wouldn't want you to think that people like me are somehow just exploiting technical loopholes or doing trivial nerdy tricks - we're not. I take on gambles - big, meaty gambles. If my robots think a horse is good value they back the nuts off it. They're doing it rationally and based on a lot of research but push come to shove they get real money - MY money - and wager it like there's no tomorrow. I use some good tools to do it but in the final analysis I'm a gambler same as you.

but doesn't Finally - I wouldn't want you to think that people like me are somehow just exploiting technical loopholes or doing trivial nerdy tricks - we're not. I take on gambles - big, meaty gambles. If my robots think a horse is good value they back the nuts off it. They're doing it rationally and based on a lot of research but push come to shove they get real money - MY money - and wager it like there's no tomorrow.

in some way contradict what you said earlier:  At the level of the individual transaction however there will be thousands of occasions every day

surely the above statement rather suggests that you're a trader, and not a gambler as you claim in the earlier statement?

I'll tell you exactly what I do and you can decide on the description:
Every time I get new data (the market refreshes) I estimate the value of every horse (if it's a horse race). If something's value to back I back it, if it's value to lay I lay it, if nothing's showing value I do nothing. If I think one horse is value to lay all the way through the race then I keep on laying it and rack up big liabilities. If bets don't get taken I may or may not cancel them depending on how the event plays out. I make hundreds of bets in almost every race. Sometimes all those bets mean that I'm green on everything but usually not and it's certainly not a goal to be green all over. The event finishes and I win or lose same as anyone else, sometimes I win or lose a lot, sometimes not much. Over all it averages out in my favor.

You can label that whatever you want but personally I don't really believe in 'traders' - they're gamblers in denial.

but you're taking advantage of price movements, rather than actually being a position player, which is what most people would regard as the definition of an out and out gambler? Is that not correct?

So you may not believe in traders, but what you are doing sounds to me like trading, not gambling. You're relying on the speed of your bots to take advantage of price movements that might throw up value bets in-running. Which is quite a lot different from someone who bets on his opinion pre race. Not that there's anything wrong with what you're doing.

Do you know anything about the horses you are betting on? I mean the reason I ask that is then yes I might agree with you when you say you are gambling, but otherwise surely it's just high speed betting on price movements. Although it might depend on the definition of gambling, as you say. If a trader is risking his money, then he's also gambling.

Do you know anything about the horses you are betting on?

No. Not one end from the other.

If I think one horse is value to lay all the way through the race then I keep on laying it and rack up big liabilities.

This sounds scary. How do you limit your liabilities? per horse? per race? or not at all?
Surely the more you can get matched then the more likely your betting in the wrong direction.

I used to find it scary but I'm accustomed to it now. Yes I do have liability limits though, not because I'm scared of betting liabilities so much as because I'm worried about some sort of programming error pouring all my money down the drain. Ultimately I have a float in my account as the absolute backstop.

I understand what you mean about the more you're able to get on the more likely it is you're wrong - but I would think about it like this:
Say I lay at 2 and the price moves to 1.5 - that means my bet at 2 is unlikely to pay off, but it doesn't have any baring on either on whether a lay 1.5 would be good value or whether 2 was good value at the time the bet was placed. If I'm being rational I should forget about my bet at 2 and calculate the likely value of a bet at 1.5 independently. I know that overall my reckonings of value are sound and the fact that I may have got the bad end of some variance a moment ago is neither here nor there. If 1.5 looks like value to lay then I lay again. On the other hand if it's value to back I switch sides and back it.

but aye robot, what is your criteria to assess whether it's a value bet or not?

aye robot, are you finding it harder now with the declining liquidity in-running?

are you finding it harder now with the declining liquidity in-running?

It's hard to say - on the one hand my returns in 2016 have been good, better than 2015 which was better than 2014 and I'm optimistic about 2017. On the other hand my operation is getting ever more sophisticated so I can't say what my returns would have been had I not innovated.

I had the great good fortune to start in the days before the cross-matcher when it was really easy. When that first came in I had a tough year immediately after but since then I've rebuilt and I now exceed even those heady days. I think if I started now in the way that I did then I wouldn't succeed, but whether that's because of reduced liquidity or because people like me are getting more effective all the time I couldn't say. One of the things about being a long term player is that you build resources like banks of data that new players simply can't access so new entrants now face far tougher competition than I did.

It is undeniable that less money is being matched - it's there in Betfair's own data (freely downloadable to all) but even now there's always £100k matched in running on even the cr@ppiest races, and there are circa 12,000 races a year in the UK and Ireland so it's not like there's a shortage of opportunity.

It's also hard to say what reduced liquidity really means, what causes it or whether it's good or bad. In a sense I have reduced total liquidity in the past year myself because I'm becoming more accurate and targeted in my betting. As a result I've reduced my transaction count and improved my average profit per bet to make an overall gain. That means I'm giving away less value to the average punter which is bad for punters. On the other hand I'm out competing other botters, if that helps bust out some of the more marginal Bot players that'll certainly mean lower liquidity but on the flip side it'll mean that there's more opportunity to match value bets both for me and for all the manual players. The cause and effect chains of all this are so complex that I don't think anyone can really say what the ultimate effects of a given cause are.

In the end I think we all have to be careful what we ask for - I'm not sure I want more liquidity as more efficient markets mean less opportunity to get value. On the other hand I do want people to play because otherwise I can't take their money, and I want them to keep playing so they need reasonably efficient markets to keep them entertained. There must be some sort of Golilocks situation but I don't think anyone knows what that is.

but aye robot, what is your criteria to assess whether it's a value bet or not?

Well I can't tell you that can I... that's my whole gig.

Broadly though - it's like I said above, I identify what types of betting behaviors typify over-reactions or panic betting and bet against them.

aye robot, I know in the past you've said that you never "trade out" a position. So what's your opinion of the typical short term trading (open a position and then close the position for a profit or loss, usually pre race) and people trying to use bots to do this? Do you believe it can never really be profitable and is a fool's errand or is it just something you've not been interested in doing?

Greening out your positions just for the sake of it or because you're scared of the liabilities isn't optimal, which isn't to say that you can't do it and still be profitable.

The starting point for understanding why is that whatever strategy you use you must place value bets, there is simply no combination of bets that returns a profit without showing value. This applies to everyone whether or not they like or understand it and it applies equally to 'traders' automated or otherwise. Now let's say you can somehow identify a signal that indicates that a price will shorten - what you've found is an indicator of value to back. Say you take that back position and get matched, in theory you can green out without any reduction in returns by taking a true value lay bet (zero EV if you prefer that term), but in practice that's not quite true. It's not true because all else being equal your green out bet is more likely to be matched the worse value it is. Therefore if you're not correctly identifying the value of your closing bet - and if its value is not zero or better you're throwing away money by closing out.

On the other hand if you can identify a value lay bet then you should take it. The point is that the two bets have nothing to do with each other and should be treated separately if you want optimal returns.

There might be other reasons to green out like freeing up funds and depending on your situation it might save you comm (although I doubt that's often true) but in pure betting terms it's not beneficial.

looking at my post above I didn't express something well, this is what I should have said regarding closing out a value back position with a lay bet:

Looked at simplistically if you bet randomly into the exchange you get true value (zero EV) and therefore break even pre-comm and just take the marginal loss of you comm rate. This suggests that if you take a series of positive value back positions followed by lays made without consideration of value then your lays should break even, your backs will win and you will be in the same position as you would have been if you only backed. However in practice this isn't true because not all bets are matched and when you bet without considering value your poor value bets will be matched more often than your good ones. Your good value back bets either matched (good) or didn't (neutral) but either way you didn't risk throwing away money on poor value bets.

Or you can think about the same thing this way: You wanted to open a back position so you waited for a positive signal and put in a back order at positive value. Maybe it matches or maybe not, but you can take it or leave it because if it doesn't match that's fine you just don't make any money, therefore you can set the price and be sure only to bet at good value. Now assume your opening bet matches and you're absolutely determined to close out - that means you go from being able to choose whether or not to bet to being forced to bet even if its value is negative. That means that the average value of your closing bet will be negative (for reasons described above) because you don't have the option to just not bet.

Interesting stuff, aye robot. I'm not a botter, don't touch horse racing and no inplay for us Aussies, but profitably do generally the same as you.

I will take issue with one thing you said, there is simply no combination of bets that returns a profit without showing value. Many people reading that will think each and every bet has to be a value bet, which is untrue. You can make a poor value bet if you anticipate making another bet, which may also be a poor value bet, if they net a profit. I do this all the time, based on what I call the psychology of markets, which you allude to.

* Although the term 'value' is a rather more slippery concept than many assume.

i suppose the only people bot users like yourself are winning money off are other bot users and those who bet manually inplay

and anyone who does inplay manually is going to be up against it imo, especially if you don't have fast pics

don't think bot users make any difference to someone who just wants to take a position on the market beforehand. Like me

Very insightful. Thanks aye robot.

Some smashing gen from aye robot - thanks for that.

Interesting that Lewisham ranger mentions fast pics in response - it just shows how two diametrically opposed methods
can yield results from the same market, fast-pics-user with race-reading and AR with his market-reading. In practice,
fast-pics-user can still get hammered if he assesses value incompetently.

There used to be an old fella on the horse racing forum who paid high PC and said he seldom won more than £10 a race.
His skill was reading the race better than most people and he did it all from slow video. (I'm sure PC was not designed
to catch people like him, but BF took his money anyway.)

Aye Robot - do you play on the "low-mayhem" I/R markets e.g. golf, cricket?

Aye Robot - do you play on the "low-mayhem" I/R markets e.g. golf, cricket?

No - I'm working on it though. My main focus this year will be on football and tennis but recent changes to the API (the means by which you communicate with Betfairs servers) mean that it's now much easier to get data from many markets simultaneously. That's great for the likes of me because it means I can build really good simulations of markets I have no experience of.

I think there might be more mayhem in cricket than first appears. It's certainly less appealing to botters though just because the events take so long and there aren't that many of them. A lot of what makes horse racing good is that there are so many events and they're over quickly. As a rule of thumb I think it takes me about 1000 markets to see my variability shake out. It takes a long time to bet on that many cricket matches but it's only a month's worth of horse races. The other thing is that the delay in horse races is only one second which doesn't give a human any time at all to make a reasoned decision let alone get a cancel order in whereas the 5 or more that you get on other sports is ample time to weigh up quite a lot.

Interesting.

Have you switched to the streaming API? Or are you in the process?

I've started switching but I'm doing it with caution. I've got it all written now but I'm moving my betting over slowly and watching with care.

Yeah, I was interested, but I don't rely on speed the way you have to, so it's not a priority yet.

hate to break it to you, but this user aye here you all seem to be in awe of is also all you guys used to complain about

he doesn't care much about sports, doesn't really (have to) gamble but instead relies on bots (enemy #1) and fast data (enemy #2) to pick of others, even using cross-market-matching algorithms (enemy #3) to do that.....there isn't much more to it, even though he tries very hard to convince others and most importantly himself that it's about his super models and the "big, meaty gambles" he, the big gunslinging gambler, takes

I was interested, but I don't rely on speed the way you have to, so it's not a priority yet.

It's really less about the speed and more about being able to get a lot of markets at once efficiently. That plus getting it all sorted out ahead of the time when it may become compulsory.

I kind of agree with you fixed. As I said earlier, I don't think aye robot is a gambler at all.

Problem is can we really complain about bot use on an automated betting website?

The bloke is totally honest about what he does. Just because he manages to do something
that most people can't doesn't make him a wrong 'un. If you could work out how, you'd copy
him in a heartbeat.

Is he a gambler? Yes, but he puts the odds on his side. He still risks large amounts of money
and exposes himself to the risk of a long series of heavy losses. Even a casino can be broken
if someone wagers enough and gets lucky enough. Instead of carping, learn from him while he's
generous enough to share his knowledge.

He's not a gambler. He's an arbitrager, that's something completely different. He's winning money from the fluctuations in markets, rather than actually taking an opinion on an event.

Aye Robot, What do you tell new people you meet about what you do for a living if they enquire? Do you struggle to explain it? Do you call yourself a professional gambler?

What do you tell new people you meet about what you do for a living if they enquire?

Mostly I keep my activities on here completely quiet. I also do something else and I don't want the people from that field to know about this one - also I don't want the security problem of people coming after my computers so I keep it all very low key.

When I do tell people about this I explicitly talk about 'gambling' and take care never to use any euphemisms.

I started that rule as a discipline for myself. When I first began I was really strict that I would never allow myself any illusions about what I was getting into. I knew that gambling was very problematic for a lot of people and I didn't want to be one of them so I took a lot of care never to be any kind of fantasist. Being straight forward about the terminology was part of that for me.

Do you struggle to explain it?

Yes. There is something about probabilistic thinking that seems to be fundamentally offensive to the human brain. Many people simply can't (or won't) grasp the fundamental concepts.

My closest friend has known about what I do since the start and I have tried to explain it to him on numerous occasions but he just doesn't get it. He's not thick, but there is something in his brain that just will not allow him to see the connection between things that seem to be random and things that don't.

I agree, the sucking up to this guy is becoming rather sickening.

Clearly he's very well skilled at what he does, however he's making money out of people who have a passion for gambling while he knows next to nothing about what he's betting on.

good luck to him but you can count me out of the general love-in.

Lewisham - what do you think would happen to the money if I didn't win it? It would just be sucked up in commission. At the level of the individual bet I'm taking my counter-party's money (or else he takes mine) but when I withdraw it's Betfair's money that I'm taking because that's where it would go if it didn't go to me.

For me to bet there has to be a gap between what's being traded and true value, I make money by narrowing that gap and keeping the difference. That means that I keep the market closer to true than it otherwise would be and in doing so I keep the average punter enjoying his play for longer than he would without me. It's true that I marginally reduce his chance of becoming a net winner but let's face it - he wasn't going to be a winner anyway. Perhaps people like me change his chances of showing an overall profit from 0.1% to 0.09% - is that such a big deal?

I'm not here because I want to help the punter but then neither are you. I'm here to make money, but in doing so I form part of the total exchange ecosystem that we all depend on.

aye robot is just part of the evolution process of Betfair. Of those who join Betfair some are capable of taking advantage  of the opportunities that it offers but most aren't so go the way of the Dinosaur.

No point in complaining either adapt or die.

Arbitrage is something else.

Yep. Arbitrage is misunderstood on here. I can't recall ever seeing a genuine reference to arbitrage, which is broadly speaking taking opposing positions in 2 or more separate markets. I do arbitrage and have a fairly big one ongoing at the moment.

There is something about probabilistic thinking that seems to be fundamentally offensive to the human brain.

I've long maintained the only thing of any practical use formal education taught me was a basic understanding of probability.

I don't bot, but I know enough to know what can be done with them to avoid sports and markets that are conducive to botting.